Oct 10, 2008

India - Nuclear power to cost Rs 4 a unit,half industry estimates

Vandana Gombar / Mumbai October 10, 2008, 0:24 IST

Contrary to perception, the cost of nuclear power based on imported fuel and equipment will be “comparable” to that from the conventional power plants, says Shreyans Kumar Jain, chairman and managing director of the Nuclear Power Corporation of India (NPCIL).

NPCIL, the only company authorised to build power plants in the country, is currently negotiating import contracts with four international vendors — General Electric, Westinghouse, Areva and Rosatom.

“We have conveyed to them that there is no subsidy available to nuclear power, neither is there a plan of the government to subsidise, so the first and foremost requirement is that the project proposals must ensure that the tariff is comparable to any thermal plant. I am using the term ‘comparable’ and we are very confident on that front,” he told Business Standard.

Even after factoring in the cost of waste disposal and decommissioning of the plant, this “tariff is unlikely to be above Rs 4 per unit,” he added. This is half the rate that industry officials were expecting.

According to a recently released estimate by the Central Electricity Regulatory Authority Commission (CERC), the typical power production cost per kWh with domestic coal is Rs 2.94 and Rs 3.50 without domestic coal. For hydro power stations the cost varies from Rs 1.79 to Rs 4.72 depending on the location, water flow pattern and age of the power plant.

Jain also said that NPCIL is likely to be the sole nuclear reactor builder in the near future since it would take at least two or three years for the government to finalise rules and regulations for private sector participation.

NPCIL expects the country’s nuclear capacity to increase to 30,000 Mw by 2020, from a base of a little over 4,000 Mw now.

The plan is to set up four nuclear power parks based on imported light water reactors. Each park would ultimately scale up to 10,000 Mw of capacity.